MUMBAI|BENGALURU: In the largest private equity buyout so far in India’s real estate sector, Xander Group has agreed to acquire 100 per cent interest in Shriram’s GatewaySEZ in Chennai for $190 million, or about Rs.1,220 crore, with further commitment of $160 million to expand commercial component of the integrated township.

“It is a long pending transaction. Shriram Properties had also signed term sheet with Ascendas earlier for the same asset,” said a person close to the development. The deal involves 1.7 million square feet of occupied and operational special economic zone, and a partnership with Shriram Properties to deliver the under-construction 1.9 million square feet, the two firms said.

“This acquisition demonstrates our continued interest in large, well-positioned assets with growth potential across gateway cities in India, and nicely complements our existing office portfolio”, said Rohan Sikri, senior partner at The Xander Group. Shriram Properties will continue to develop and own the residential and retail components comprising 2.6 million square feet while Xander will develop an additional 1million square feet of office space.

Xander, armed with a commitment of $2.3 billion, or about Rs.14,800 crore, to the Indian market, will look at developing office space via SEZs in Delhi-NCR, Bengaluru, Pune, Mumbai and Hyderabad, company officials said.

Shriram Gateway is the first integrated township in Chennai with large office campuses. It has 4.6 million square feet of SEZ and IT office space with Accenture as is its largest tenant.

“The mixed use, commercial cum residential project is a benchmark in the industry, and we plan to develop many such projects across cities in India,” said M Murali, managing director at Shriram Properties. Shriram Properties had recently announced plans to invest `15,000 crore over the next 7-8 years for the development of around 30 ongoing projects across six major cities — Chennai, Bengaluru, Hyderabad, Visakhapatnam, Coimbatore and Kolkata. Its key investors include Walton Street, Starwood capital, TPG Capital, Tata Opportunities Fund, ASK, Motilal Oswal, Amplus and ICICI Prudential.

“Office and residential market is expected to be main drivers for fund while alternate sectors such as retail, warehousing and hospitality will gain prominence. A secure and favourable regulatory environment is expected to generate more interest from offshore investors,” said Ram Chandnani, MD for advisory & transaction services at consultancy firm CBRE South Asia.

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